Eurozone

The eurozone (EZ), officially called the euro area,[7] is a group of 19 member states of the European Union (EU) that have fully implemented the Economic and Monetary Union of the European Union and have thus adopted the euro () as their primary currency and sole legal tender. The monetary authority of the eurozone is the Eurosystem. Eight members of the European Union continue to use their own national currencies, although most of them have agreed to adopt the euro in the future.

Euro area
Policy ofEuropean Union
TypeMonetary union
CurrencyEuro
Established1 January 1999
Members
Governance
Monetary authorityEurosystem
Political oversightEurogroup
Statistics
Area2,753,828 km2
Population342,376,602 (Jan 2021)[1]
Density124/km2
GDP (nominal)$12.712 trillion[2]
Interest rate0.00%[3]
Inflation8.9% (July 2022)[4]
Unemployment6.6% (May 2022)[5]
Trade balance€310 billion trade surplus[6]

The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. Croatia will become the 20th member on 1 January 2023.[8] Other EU states (except for Denmark) are obliged to join once they meet the criteria to do so.[9] No state has left, and there are no provisions to do so or to be expelled.[10]

Among non-EU member states, Andorra, Monaco, San Marino, and Vatican City have formal agreements with the EU to use the euro as their official currency and issue their own coins.[11][12][13] In addition, Kosovo and Montenegro have adopted the euro unilaterally.[14] These countries, however, do not officially form part of the eurozone and have representation neither in the European Central Bank (ECB) nor in the Eurogroup.[15]

The ECB, which is governed by a president and a board of the heads of national central banks, sets the monetary policy of the zone. The principal task of the ECB is to keep inflation under control. Though there is no common representation, governance or fiscal policy for the currency union, some co-operation does take place through the Eurogroup, which makes political decisions regarding the eurozone and the euro. The Eurogroup is composed of the finance ministers of eurozone states, but in emergencies, national leaders also form the Eurogroup.

Since the financial crisis of 2007–2008, the eurozone has established and used provisions for granting emergency loans to member states in return for enacting economic reforms.[citation needed] The eurozone has also enacted some limited fiscal integration: for example, in peer review of each other's national budgets. The issue is political and in a state of flux in terms of what further provisions will be agreed for eurozone change.


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